What’s driving this Daisy?

After a merger and lengthy bedding-in process, Daisy Distribution is ready for business. Managing director Dave McGinn tells Paul Withers that Daisy is looking to put down a big marker in the distribution market

It may have taken six months of waiting, but Anglia Telecom Centres and Fone Logistics have finally come together to be branded as Daisy Distribution. With the two companies now merged, managing director Dave McGinn is ready to reveal to Mobile News what lies ahead for the new look distributor.

Daisy Group acquired Anglia Telecom Centres for £17 million in August 2009 and followed this with the purchase of Fone Logistics for £3.6 million in June 2010. Half a year of mystery has followed, with plans for what was to happen next with both companies kept closely under wraps.

McGinn defends the length of time taken to fully integrate the two businesses and claims it was known within the first six weeks of the integration process what needed to be done.
“We had an amalgamation of two businesses that we needed to bring together to ensure we had the right structure,” he says. “Within the first six weeks we had understood what we were going to do with it.

“The rebranding was the final part of it. The number one priority was [engaging]with our partners from both businesses at the same level they were expecting before, and ensuring the internal systems were up to speed. We believe it was a quick process.”

Trust

McGinn claims that just 10 partners were lost during the integration of the two businesses, leaving it with 520 actively trading partners over Q4 2010. He
dismisses the small losses and says the key was admitting to partners when things weren’t running smoothly and explaining to them how they would fix the problems. It’s something he feels has solidified the level of trust between the company and its partners.

“The amount of partners we have lost is minuscule in what you would expect when two businesses come together,” he says. “In general the impact has been positive and the partners seem happy with what we’ve delivered so far.

“This has been about the engagement we’ve had with them. Not every part of the process went perfectly, but if we did something wrong it was about admitting our mistakes and explaining how we would rectify it. That’s worked well for us.”

Now Daisy Distribution is looking to put down a marker in the distribution market and one of the key drivers in achieving success will be its relationships with the networks, in particular Vodafone.

Daisy Distribution distributes airtime on behalf of O2 as a Centre of Excellence distributor and is an Orange ‘Federated’ partner. But perhaps the most striking partnership is with Vodafone, where it holds platinum partner status, meaning it is the only distributor to supply Vodafone airtime directly.

McGinn claims Daisy Distribution is making good headway with sales of O2’s Joined Up fixed line proposition but feels the relationship it has with Vodafone, which includes the license to distribute and support the operator’s One Net suite of products, will be the key driver in its strategy and a significant differentiator from its competitors in this fierce battleground for customers.

“We are closely linked with Vodafone’s strategy going forward. That will significantly help our activity in the marketplace and will be absolutely key to our business and what we’re looking to achieve.”

Momentum

Daisy Distribution’s intentions to work as closely as possible with the networks is plain to see. However, McGinn says it will also look to sell products the networks don’t currently stock and will not look to sell themselves in the foreseeable future, classing these as ‘additional
product sets’.

“Daisy Distribution is separate from Daisy Group in that it is purely about selling the networks’ product sets,” he says. “For example, if a network brings out a fixed line product, although Daisy Group is a major fixed line player, we will only actually sell what the network has launched.

“[In] the next 12 months we’ll look to gain momentum selling additional product sets. We’re looking at which other product sets Daisy has that the networks haven’t got, and not looking to get, that we can utilise.

“Servassure is one of Daisy’s organisations and specialises in the maintenance of telephone systems. We see that as an ideal fit in the unified comms arena that would complement our product set. It also won’t be in conflict with what the networks actually want us to achieve.”

Growth of its partner base is another priority. A marketing plan is being compiled that is scheduled to go live on April 1. McGinn won’t say how many partners he’s targeting but indicates things will become clearer from Q2 onwards.

Says McGinn: “We’ve played it low-key so far and we’re now beginning to raise the bar with our marketing plan, where we’ll start to advertise our services. It’s very important we help partners increase their business, which ultimately helps increase ours. A lot of that comes from the marketing we’re looking to do.”

Unified

Making an impact in the unified communications market will also be important for the company this year. McGinn suggests that companies bought by Daisy Group, such as service providers SpiriTel for £27.3 million in November and NEG MBO Two for £23.5 million in December, will help expand its product portfolio to achieve this.

He also appeals for partners that continue to avoid selling unified communications products and services to have a rethink, as he claims they won’t provide customers with the full service they expect from their local dealer in today’s market.

“Over the next year we’ll be looking at other opportunities that complement our business,” says McGinn. “We’re not going to stand still. Daisy made a couple of very significant purchases recently and is very much on the acquisition trail.

“We’re going to have a different array of partners and some will only ever want to sell mobile connections. There’s nothing wrong with that, but customers are now looking for more efficiencies within their business. If a partner is only selling mobile then it’s not providing customers with these efficiencies. They have to bring more than one product to the marketplace.”

Service

So what does Daisy Distribution’s long-term future hold? The joining of two relatively successful airtime distributors should result in market dominance, right? Not so, says McGinn, who claims that being number one is far from his thoughts.

It comes back to his view on increasing the 520 currently active partners’ businesses to increase that of Daisy Distribution’s. McGinn says that although the sums tell you Daisy Distribution has contact with more than half the independent partners thought to remain in the marketplace, service delivery and not size will determine how successful it is.

He says: “I don’t want to be number one for the sake of it. I want to ensure we offer a good service out to our partners. It’s all about service delivery. It’s irrelevant whether we’re number one or number 10.

“The general consensus is that there are about 1,000 independent mobile partners in the market, and if that’s the case we have touch points on a contract connection basis with 52 per cent [of them], but I’m not sure you can label us as a ‘superpower’ within distribution.

“How much can you grow your base by? It’s impossible to gain 100 per cent market share. I’m not saying we’re not going to strive for an increase in partners, but the focus must be on how we increase our partners’ spend and activity out to customers. That’s our number one priority.